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Vienna, 23 December 2011 : Moody’s confirms Austria’s AAA rating Fekter’s comments following Moody’s rating: “We have to improve Austria’s position as a business location.“
On 23 December 2011, the US rating agency Moody’s once again awarded
its top grade of “AAA” to the Republic of Austria and confirmed its
business outlook as “stable”. The reasons given are the economic power
of the Austrian domestic economy, which enjoys above-average growth
levels and which has a skilled workforce and a competitive export
sector. Moody’s also referred to high average levels of income in
Austria and the low levels of unemployment here.
“All in all, the rating Moody’s has given to the Republic of
Austria was favourable in terms of the overall situation of the country,
but at the same time, Moody’s evaluation contains warnings and critical
remarks that need to be given particular attention. This favourable
rating does not mean that we should now rest on our laurels”, Finance
Minister Dr. Maria Fekter said in respect of the evaluation by the
rating agency. In her view, the most important point is to improve
Austria’s standing as a prime business location, in order to maintain
the willingness of investors to invest in Austria over the medium term.
“These debates on special taxation of high net worth individuals and
corporate group taxation are not exactly encouraging to investors.
Issues such as this can come back to bite us sooner than we think”,
Fekter said.
And, she said, factors such as Austria’s attractiveness as a business
location will have to be taken more into account in the context of
plans to implement a debt brake. “The concerns are not that the
super-rich will take these measures as a personal affront, rather, what
we have to worry about is how investors will evaluate investment in
Austrian jobs”, Fekter noted. If Austria’s standing as a business
location and its reputation for protecting investment deteriorate, then
medium-term investment decisions might no longer favour investing in
Austria.
Fekter noted that Moody’s reconfirmation of Austria’s triple-A rating
is a good first step towards obtaining competitive borrowing rates, and
that our objective now is not to allow interest rates to diverge too
widely from those in Germany. “If we keep the interest rate differential
small enough, then Austria’s refinancing costs next year will stay
within manageable limits”, Finance Minister Fekter stated.
In addition, she noted that the government needs to keep an eye on
the stability of the banking sector and the associated high level of
cost to the State. Moody’s also takes a critical view of the early
retirement situation. “Early retirement has to be made less attractive
as an option, and the de facto pension age needs to be raised significantly”, Dr. Fekter emphasised.
“We have to continue resolutely along the path we have embarked on,
reducing Austria’s deficit and gradually increasing Austria’s standing
as a prime business location. We also have to embrace the necessary
structural reforms and secure Austria’s position in the long term”, Dr.
Fekter stated in closing.